I am in two minds about the auto bailout -- it is necessary and I support it, but if people aren't buying the cars Canada makes why do we think they will start to after the government money is spent? Perhaps the automakers' plans will work? One can only hope.
Harper and McGuinty expected to announce auto industry aid package
TORONTO - On the heels of the American aid package for General Motors and Chrysler, Prime Minister Harper and Ontario Premier Dalton McGuinty are expected to talk about Canada's contribution today.
The Bush administration pledged US$17.4 billion in emergency loans to the beleaguered automakers Friday, meaning Canada will have to provide C$4.2 billion if it sticks to a promise made last week.
The federal and Ontario governments said they'll match one-fifth of any U.S. bailout, in proportion with Canada's share of North American auto production.
Spokesmen for Harper and Ontario Economic Development Minister Michael Bryant called the Bush bailout "good news."
And it was also welcomed by the Canadian Auto Workers union.
Full story here: http://ca.news.yahoo.com/s/capress/081220/national/meltdown_autos_canada
5 comments:
Sir I'm with you on this one.It seems to me that the big three are always falling behind other car companies.
Correct me if I'm wrong here,but wasn't foreign car manufacturers that came out with compact cars before the so called big three came out with theirs?
Besides the big 3,I don't see any other car companies that have the same problems at the same magnitude.
I think that the P.M.should give conditions to the bailout that they should keep jobs here in Canada,and that they should change the types of cars that they produce. Otherwise they would just be throwing money away.
I also want your thought sir,since we're about to go into deficit anyway what if the government would come out and say that they would want to create a Canadian car manufacturer the same way we did when we created Petro-Canada. Once created and profitable we can then make it private just as we did for Petro-Canada. At least this way we don't need to rely on other countries to see what they are going to do that would affect us here in Canada big time. I would like your opinion on this Mr.Morton.
They should approve the ZENN car for use nationwide and allow other electric vehicles too. In fact, they should make GM bring back the EV1. They should also require GM, Ford and Chrysler to cut wages and make half their product line energy efficient at minimum.
Of course, all of that won't help what they've already said and done. The reputation they all have is that they build substandard vehicles and they have terrible customer service. Add in a recent news article I read somewhere, wherein GM admitted they don't make quality vehicles, and it all seems a waste to bail them out. On the other hand, if they don't get time to adjust and maybe save themselves, the repercussions would be disastrous for all of us.
American cars are stuck somewhere around the year 1995 - European and especially Japanese cars are more advanced, safer, better designed, with lower consumption, environmentally friendly - whatever you imagine. There has to be RADICAL reform in these companies, but everybody is afraid to do it. Yes, bailout will help - for how long? Half a year, year, two years? And then what. Citizens don't want to buy this cars, so government just takes our taxes and put it to these companies...
Take care
Lorne
To answer the specific question about auto industry, I’ve two main objections.
1) Wages+Salary negotiated when industry wasn’t receiving federal loans, need to be renegotiated to account for the feds wanting a solvent company to employ workers or get their money back or whatever. Matching Japanese wages+salary seems *more* than reasonable when you consider what has happened to the rest of the semi-skilled middle class since these wages and seniority wage increases were enacted pre-Asia globalization.
2) The industry is using the reasoning that an absence of big-3 just-in-time parts orders will collapse the entire supply chain. If the industry has been structurally overbuilt based on cheap USA credit and can’t contract as their report last week claims, they are basically saying we need mid-2000s USA consumer purchase levels or nothing at all. It reminds me of GWB saying your either with us or against us in attacking Iraq. I’d need to see evidence the supply chain could still function at say, 60-80% USA mid-2000s consumer volume, in the decade ahead, before committing any funds. Meanwhile Zenn languishes….
Our plants are USA branch plants and I don’t like bailing out incompetant CEOs in finance or auto.
I feel bad giving this advice because if it means anything it cannabalizes wind turbines, electric cars, transit (Wpg houses leading N.A. manufacturer BTW), and Bombardier’s LRT/High-Speed-Rail.
(meant to add I was just pasting another blogversation post)
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